they describe it as static situation and a waiting game. authorities told them that the bunker on the suspect's property has electricity, food and a television. continuing coverage on that and the rest of breaking news throughout the afternoon. i'm shepard smith. >> neil: economy is suffering, is this time to be hiking. i'm eric bombing and the economy isn't just slowing it's shrinking. it dropped by tenth of percent. it's the first time that happened in three and a half years. all this as democrats are pushing for more tax hikes. former reagan advisor art laffer says that is the last thing we need. first thing in three and a half years we will an actual contraction in the economy and brought it to 2.1%. we spent $5.8 trillion and this

is what we get for it. >> it's just dumb on the outside. government spending is milton friedman is taxation. government doesn't create resources, it redistributes resources and this government spending is why we had the recession. obama continued the bad job for four straight jobs and this is the result. >> eric: but they would say isn't for government spending we would have no growth? >> government spending it's not in spite of government spending it's because of the government spending. we think of it, you got two guys in the world, "a" and "b". if "b" gets unemployment benefits who do you think pays for it. it's "a" and it's taxation and that is the root of the problem. >> you drop taxes like the blogo sphere, no he raised taxes.

did ronald reagan raise or lower taxes? >> he cut the highest tax rates. you want to look at rates from 70% to 28%. now, is that a good enough tax cut for you? >> eric: what happened? >> we had great growth. when the tax cuts took effect, we phased in the tax cuts but when they took effect, it went like a rocket ship. we had 7.35% in 1983 and 5 1/2 in 1984. >> eric: and the tax receipts increase? >> there is some guys curve -- i don't know who the heck it is. we have the highest corporate tax rates in the world and one of the lowest tax revenues. go figure. >> eric: they were spinning all this different directions. do we have it?

the g.d.p. report it's negative growth time. how about this one. despite lousy g.d.p. report u.s. economy is primed to expand. it didn't look like it to me. good news in a bad g.d.p. report. good or bad? >> it's ridiculous. we have had --, no, i don't think so. we've had the worse single recovery in the history of the u.s. in fact the recovery is much worse below the next worse than the next worse is below the best. it's tragic. third quarter analyzed 3 pchblt 1% growth to a negative growth, what happens? >> you have the whole out put of the economy shrinking. not just expanding slowly but it's shrinking. you can explain some of that by sequestration and defense spending was down a lot but you

still have a lot in the economy. we know how to fix it. spending restraint and free trade. >> eric: the laffer curve. thanks for joining us. not ready to cut, listen. >> the president told him personally the country does not have a spending problem. did that happen? >> you know, there is a lot of reports about conversations internally. i don't have a readout of any of the president's personal conversations with the speaker or anyone provided. >> given the discretionary spending, president believes we don't have on a spending problem? >> i am not sure what kind of rhetorical game you are trying to engage in. >> eric: he considered that a rhetorical game. what were you trying to get at? >> he said we had a healthcare

spending program but whether he told the speaker boehner, it's really not surprising that carney wouldn't quote from a private conversation but he strongly suggested that president obama doesn't believe we have a spending program outside of entitlement programs. >> what is also true non-defense discretionary spending, putting aside defense and entitlements is the lowest level since dwight eisenhower. so, you know, the president has been serious about spending cuts. he signed into law $2.5 trillion in spending cuts. he wants to do more as long as we do it in a balanced way. the affordable care act was to slow the growth of medicare but one way to expand healthcare coverage was to add more people

to medicaid. although he did more programs, he did propose the deal speaker boehner turned down on 2011 for virtually all house republicans rejected it and even some democrats are not very enthusiastic about it. >> eric: thank you very much. the white house and democrats pushing for more tax revenues amid all of this? two democratic stlatd jists, steven laser they got the right idea. let me back to jay carney, the president cut $2.5 trillion. i'm trying to figure out where we cut. do you have any idea? >> thanks for having me on your show. we cut $2.5 trillion from defense spending and from medicare spending week do have a problem in the economy right now. it's a job creation problem. that is what we're trying to do and everybody is concerned with doing. at the same time we have a

deficit problem that makes it more complicated. >> i agree with you. >> we have a jobs problem and deficit problem. >> eric: don't we have a spending problem? >> here is the bottom line. this is math. spending problem or revenue problem. you are saying it's not the spending problem, its revenue problem? >> forget unemployment 7.9% down to 4%. that is whole bunch more people paying taxes and whole bunch more revenue. at that point we would be close to even. >> eric: still running deficits. so spending in or taking not enough revenue. >> i agree with paul krugman the last thing you want to do in a recovering economy is cut off spending that is going to choke off the recovery. >> here is spending over the last ten years. 2003, this is total federal outlays, $2.16 trillion f you draw a line between 2008 and 2009 prior years being bush

years. average of those years under bush was $2.5 trillion. that was the number we spent. that was our spending. president obama an estimate will be $3.6 trillion. that is an increase of 44%! 44% increase in spending. that doesn't look like a problem to you? >> what i would love to have the just that position of job creation, we created 5 million jobs in the united states. if you were saying it's worse but the five million people are saying it is worth it. >> eric: you are saying there is five million jobs created? >> from the low point. >> that is different. >> he was in office. i think, come on eric, we spent

5.8 t78d and we have a negative growth rate. >> this the first quarter we've had a negative growth rate. we a super storm sandy and lots of fiscal negotiations. i think we're probably going to have close to 3% growth rate of 2013. the recovery is coming along, but it's not coming as fast as anybody would like it but it is coming. >> eric: we'll leave it there. no major sell-off on white house despite the news. the dow still flirting with 14,000. sandra smith keeping an eye on it all. i'm looking down 44 on the day where we have negative growth for the first time in 3 1/2 years. that is not bad, is it? >> reporter: sell-off considering how bad the news were. traders were astonished that the equity market hung in there.

s&p 500 still above 1500. it continues to ignore the bad news. this economy is struggling to recover from that recession. now, the first drop in g.d.p. since the recession. these aren't great signing and u.s. dollar is getting crushed after the federal reserve announcement today the u.s. dollar hit a 14-month low versus the euro currency and just more signs that the fed is billing to pump more stimulus into this marketed to stimulate economy short term. longer term the greenback is getting hammered. >> eric: you and i spent time talking about that, you said just that. if the economy doesn't look strong enough it means the fed is going to do what i it needs to do to prime theump for the markets. look what is happening, bad g.d.p. numbers and the market has a nice showing. >> reporter: that is exactly what happens. we could get bad news on the unemployment number and the market could very rally because they know that the federal

reserve is a back stop for the market right now. when we get bad news on the economy, traders don't think, sell the stock market. they think buy it because that is the hope that the fed is going to prop up the ailing economy. it's just reverse thinking that is out there in the marketplace right now. by the way, oil and gas, your specialty is going to be a huge story here because post fed announcement, oil prices rallied above $98 a barrel. >> eric: i also saw gold spiking, as well. going for the guns for democratic lawmakers looking to rush legislation through. they may want to look to what is happening to one of their own. all stations come over to mission a for a final go.

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>>. the deaths in newtown should not be used to put forward every gun control measure. >> not discussing guns in mass killings is not discussing cigarettes while discussing lung cancer. >> while failing to enforce the thousands of laws we have is not serious in reducing crime. >> violence is a big problem too many children are dying. >> my wife would not be sitting in this seat, she would not have beening is here today if we had stronger background checks. >> law abiding gun owners will not accept blame for violent acts of criminals nor do we believe that government should dictate what we can lawfully own and use to protect our families.

>> eric: as senators take aim at guns, more americans are buying guns. new report showing ammo sales at walmart are way up. new poll shows support for the democratic governor is way down after pushing through gun control legislation. what should that say to democratic lawmakers looking to rush through legislation on capitol hill? simon rosenberg, heads up the new democratic network. on the state level, the new york governor, his popularity may be going down as he publics for more gun control. maybe that is a sign some of the senators may not want to rush through the gun legislation? >> i don't think they are going to rush through it. this will be a deliberate process and hopefully we'll have a common sense bipartisan package by the summer. that is what people hope. remember, there are two polls showing broad support for elements of what is being discussed in places like kentucky and texas. there is a middle ground that

can be forged here in the next six months. >> eric: it seems to me the senate and president obama has given the mandate. go forward with this. senate, i'm waiting to see a vote. i have a haunch the 12 senators that rated a b plus by the nra that may have been elected because of their stance on guns. i'm not so sure they are in a hurry to say aye or nay on a vote. >> you have heard express about concern over the assault weapons ban and greater interest in fixing up the background check system. i think you could see a package with background checks, cracking down on gun trafficking, moving against high capacity clips potentially. i think that will be controversial. i think you could probably get a lot of support but enough to get over the finish line. we don't know for a package like that in the next few months. this will be a tough issue.

it's going to be front and center in front of the american people the next six months. public opinion will harden around sort of an argument. >> eric: here is my problem. public opinion hashedens around opportunities with congresswoman giffords up there and parents from connecticut on tv. let's pull this full screen up to show you what is going on in america over the last 20 years. u.s. violent crime is down 49% from 1992 to 2011. u.s. murder rate down 49% over about the similar period of time 1994 to 2009, firearm ownership is up almost hundred percent. so you can't say pulling guns, whether they are assault or whatever type, high capacity magazines, you can't say pulling them off the market is any indication that the country will be safer or the murder rate will

go down? >> i think that what is the debate is going to be. i also think if you talk to police and law enforcement professionals who have been instrumental in bringing crime rates down, violent crime is way down all across the country which is why the idea that there is a culture of violence in the united states is just false. the cops will tell you the reason it is down more policing on the street and better and smarter police. they don't believe there are assault weapons getting crime rates down in urban areas. i think we should have this conversation. >> eric: here is the problem. you know violent crime and murder is not down? it's not down in the city of chicago. 508 murders and up 17%. you are laughing but there is handgun ban in the city of chicago. more gun laws is not helping that city. >> in d.c., dropped from 800 to just hundred last year. there is a gun control here.

i don't think it's a causal thing. it has to do with a broader set of strategy. >> eric: i agree with you. let's not put more gun control because there is mass shooting up in connecticut or in houston or wisconsin? >> we disagree on that. that is where the debate is. the majority of the country is ready for some kind of significant movement on this. i think both parties can come together to get something done. >> eric: we have to leave it there. they were deemed illegal by a judge so if the president cuts loose on the labor board. look at the senator cutting off. why are they suing? we'll ask one of them coming up next. ♪

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>>.

>> eric: if the president is not going to cut it loose, my next guest wants to cut them off. labor board picks is unconstitutional but they are being paid on the taxpayers dime. we talked about it yesterday and people were interested in this. the recess appointments were deemed unconstitutional but these gentlemen are still being paid? >> they are still being paid. they are basically saying we're open for business. we're ready to do our work. the president first of all decides he can decide whether the congress is in session or not, whether the senate has to confirm the appointments that the law says they have to confirm. then his point ees saying that is the opinion of the three federal judges. we're going to keep doing whatever we've been doing. there are several cases that the commissioners, three border bord members decided on that i think

are now probably one and void. one case that was appealed was found to have to be repealed. i think all their cases are going to have to be. so our legislation would say, stop paying these guys, stop providing any resources for them to move forward with other actions. they are not legally in these jobs. they ought to cease and desist. >> eric: can we talk about how important the board is. how they decide on some of these cases. there are five seats available. only three are filled and all three are filled by obama appointees? >> two of three are filled by appointments that are midnight appointments or the appointments when the senate says, it is meeting specifically so the president can't do this sort of thing. the president does it. the national relations board. this group has promulgated 200 different rules. you can have microunions to have

posting regulations to things that were not the law before and not in regulation before. this group on their own has done that. again, one of these rules was appealed. court says that one wouldn't legally happen. i think that means all 200 of the rulings that this group made didn't happen and they are affecting how business is doing in the country and affecting relationships every day. >> eric: i spoke to a gentleman named mark hannah. a former president obama campaign aide. he pointed something out. listen to this. >> the reason why it matters, next time president obama wants to appoint someone in recess he does it through the proper channels. >> this is what he has done for the past five years. this is what presidents has done eight years before him. >> i sit next to dana, i had a guy on that claimed president

bush did recess appointments the same fashion. she looked into it, in fact, president bush had recess appointments but also when the senate was gaveled out. it was agreed upon that you are not in session. >> that is right. on one of those appointments, senator harry reid was so offended the appointment was made, that is when he begin this process of not officially going out of session for a period of time that would allow the to the make an appointment. president bush never challenged that. never said i'm the one that can decide whether the senate is in session, not the senate. that is the fundamental balance of powers question here. who gets to decide if the senate is in session or not. who gets to decide whether the constitution applies. we should get to the decide if the senate is in session and the court should decide if the constitution applies and they said it does. >> eric: we're going to leave it there. by the way, three judges who ruled, ruled unanimously that

was not constitutional. thank you very much. forget the nrlb, is this how unions pushing their agenda. hill reported hollywood donors are bank rolling organizing for action. newly formed designed group to advance president's plans. managing editor of the hill, bob let's tell the people what organizing for america is. what was it? >> it was a campaign arm. what the obama has done and his people and they are transforming into what is called a 501-c4. this will be the policy arm. this has caused friction of the dnc to have competing democratic factions that will be raising money to further president obama's agenda. republicans, of course, are upset that obama is going to

continue to campaign but more in a policy sense. democrats trying to compete with crossroads on the right. this will be a group to watch. >> eric: so it acts like a campaign entity, but it will affect policy. hollywood, first thing, hollywood has violent films. will they pushing money into this group so president obama may make decisions on gun violence and how that is looked at? >> our reporter talked to union people as well as people in hollywood. they are indicating they are going to give money to this arm. remember, these are unlimited. there is no limit what i can give this group. so whether it is millions of dollars from steven spielberg or labor unions, they are going to be pumping in millions of dollars. now, organizing faction says they are going to reveal their donors but they said they will.

>> eric: president obama saying he didn't like super packets, this is going to act like one? >> absolutely. the campaign finance reformers that was pleased when president obama came into office in 2009, change washington and get special interests out of the washington money are very upset with this move. they are actually calling it for it to be shut down. that is not going to happen. they started this entity. they are turning on president obama because they are saying this is washington business as usual. they also point out that president obama has not made campaign finance reform at the top of his agenda. he has cracked down on lobbyists, but as far as changing the whole campaign finance system he has not made that top priority. >> eric: we'll leave it there. thank you. lawsuit heating up. my next guest is ready to smack down on the president's immigration policy. even though our kids are all grown up, half of america's

parents is shelling out dough. is that the time for some tough love? aving. mommy's having a french fry. yes she is, yes she is. [ bop ] [ male announcer ] could've had a v8. 100% vegetable juice, with three of your daily vegetable servings in every little bottle.

>>. >> eric: earnings for a social media beating estimates but worries about operating costs weighing on the stock. facebook is seeing stronger ad sales from mobile devices. total revenues were up 40% from a year ago.

>> here is somewhat are calling the most controversial nominee to the cabinet and head of the confirmation hearing tomorrow. jim angle reports, chuck hagel had lots of work to do. >> reporter: that is right. chuck hagel's past statements forced him to an apology tour. in recent years he has opposed sanctions on iran over nuclear program, ruled out a military strike, even suggested that iran might act responsibly with nukes and suggested that united states eliminate their own nuclear weapons. all of which democrats are cautious about his nomination. >> i'm not going to say yes or no until after the confirmation hearing. >> reporter: and republicans are even more skeptical. >> those things that he has done

in the past, things he said in the past are serious enough to me that nothing in the hearing is going to change that. >> i think a lot of republicans and democrats are very concerned about chuck hagel's position on iran sanctions, his views toward israel, hamas and hezbollah, and that there is wide and deep concern about his policies. >> reporter: now, one of his more infamous remarks is a snide reference to what he called the jewish lobby so chuck snuimer of new york after hagel apologized for previous statements and positions. senator schumer agreed to support him as did barbara boxer. but many analysts don't like the pre-hearing conversion. >> all of a sudden the candidate for high office in any administration has a sudden transformation and repudiates

everything he has in his life and anything he ever said. >> reporter: almost lance armstrong like. but now the white house is gearing up support and supporters in advance of tomorrow's confirmation hearing. >> eric: thank you, jim. >> the president is puck for fashion action on immigration reform but critics insisting we have to secure the border first. my next guest is one of them. he is representing a group of immigration agents suing the president over policy changes they say prevent them from doing their jobs. with us now, more chris crane. thanks for joining us. we have been talking about this last couple of days. you are suing the president for what? >> we actually the suit names janet napolitano and for us at the ground level. i.c.e. agents, look, i can't tell us not to not enforce u.s. immigration law.

you can't order us not to enforce the law. that is the nuts and bolts of the lawsuit for us. >> eric: how are they telling you not to enforce the law? >> basically that the new policies that has directed janet napolitano and director of i.c.e. memorandum prohibits agents from arresting certain groups and individuals that under current law were required to at least put into removal proceedings. >> eric: given that environment, what do you think 6 president obama's new push to get his immigration policy in place right away even before you secure the border? >> you know, at ice, we're more about the interior enforcement. we do everything between the borders. border patrol takes care of the land borders, but throughout this it's apples and oranges. we view the president's

comments. we looked at the bipartisan committee's plan and strangely enough we noticed that customs enforcement and immigration is not mentioned by the president or in the bipartisan plan. the group that is supposed to enforce everything within the borders. we're a little bit shocked. every year a handful of i.c.e. agents is arresting approximately 400,000 illegal aliens and taking them primarily from jails and prisons. so, we know we have a significant criminal alien problem within the united states, but the president's plan as well as the bipartisan plan seem to just completely ignore the need for strong interior enforcement. >> eric: let's switch gears. we had senator jeff sessions and he was saying the head of i.c.e. john more ton should resign, what do you think of that? >> well, we're big fans of senator sessions. he is a strong supporter of law

enforcement officers and strong supporter of stronger enforcement in the united states. we as a union have not taken a position as to whether or not we should join in the call for resignation. we have been very vocal to include our vote of no confidence that we don't have confidence in this current administration or i.c.e. with regard in enforcing the immigration laws and providing for public safety. >> eric: we're going to have leave it there. chris crane, i didn't realize there was no mention of i.c.e. is the president's plans. thank you, sir. >> he owes take on the president's immigration reform push. the executive director of a group. benvinidos. when does the president o0ic%

we were to have 11 million people in this country, that is the reason why this law needs to be fixed. >> eric: i'm not sure i agree with you. in fact i know we have a legal shift and i think we have 11 million people here because frankly it's easy to get here. >> i think you shall misinformed. many people risk their life. most of the people that come to this country is to help to

relatives as well as the economy of this country. >> eric: don't get me wrong, legal immigration, we need more workers and more economy and need more economic activity. if immigrant workers are fantastic. they provide us with a thriving economy. that is all i'm saying. >> the reality, today we have 11 million workers in this country who are contributing to society and fabric of this country that we need to figure out what to do with them. obviously, it's not to deported everybody. >> eric: good to have you. thank you so much. >> superbowl means super bets but is a the government cracks down stossel fights for your right to pony up ♪ you know when to hold them ♪ ♪ know when to walk away ♪ know when to run

..

. >> eric: it's ban we said the exception of four stays. they have outlawed sports gambling even to your office pool. we'll bring in john stossel says that is crazy. >> it is crazy. it's nice they don't enforce it but that let's abuse people. they raid some poker games. guys wear masks and guns drawn. >> eric: so i can't have a poker game. i can't put ten bucks buks on an office pool because that is illegal but i can walk down a street and pick up a lottery ticket? >> that is so disgusting. state says, there is a numbers racket. mafia is running that. we can't allow that. people are still doing that. we will run our own lottery. that will put them out of

business. they have state lotteries. they take 50% of the money. numbers racket guys took 5%. it's a much worse scam and running commercials suggesting don't work, happiness is winning the lottery. they encourage poor people to bet. >> eric: so the state lotteries even though it's like 48 states and one of them is 48, it's a federal lottery. >> except they are run by individual states. >> eric: sha why it is important. >> there is better odds in massachusetts. they only take 30% of the money. >> eric: so necessity allow sports books in office pools. >> the republicans have a federal law that prohibits that. new jersey said okay, we're going legalize sports begtd but it hasn't happened because there is federal conflicts. superbowl weekend last year in vegas, $93 million was bet. millions were bet.

>> eric: there is a federal law that prohibits the ice of marijuana? >> there is. >> why doesn't washington say we're going to allow in it our states? >> true, but the justice department is cracking down continues to hold raids. opponent who smoked it himself and joked, yeah, i inhaled, that was the point. he is cracking down on some of these states. >> eric: so why wouldn't the states with sports betting. >> think that is what new jersey has in mind. >> eric: anybody could really benefit is new jersey. what about horse racing. it's allowed in a lot of places? >> that is legal. people that can't get to the track that is off track betting. new york couldn't make money, only a government could lose money being a bookie. >> eric: one of the best

athletes ever is secretariat. >> we have to leave it there. thanks a lot. brother. good to see you. empty nesters. more adults, kids are emptying their parents' bank accounts. time for tough love. this is for real this time. step seven point two one two. rify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

>>. >> eric: all grown up and parents still paying up. new survey showing half of parents between the ages of 40 and 59 are providing financial support to at least one adult child. dr. karen stewart says it doesn't have to be that way. you have a couple of ideas how to kick the kids out of the house once they are old enough. >> of course. what you need to do is you need to devise a plan for them to be able to work on their own.

they need to be able to have a responsible system to have a job to get themselves on their own two feet. oftentimes parents think it will help them. what i recommend to parents, is to have a graduated scale. for instance, if you paying thousand dollars a month, maybe next month is $900, next month is $800. sometimes it's not the best but give them the boot and push them out the door but you need to push the tough love up. >> eric: let me go through a couple of them. have an open conversation with the kids. that is great place to start, right? >> you have to have an open conversation with them. basically what is going on, they may not know it's going to be put a financial strain on you. you have to be able to tell them look, we are both adults and i love you. i want to take care of you, but you still have to be responsible for you. let's talk about what can you afford, what kind of help you need. what can i do to help. >> eric: a lot of kids might be

surprised they can't afford something. number four on that listed, don't feel guilty. as a parent i have a 14-year-old. that is a big one. how do i not feel guilty? >> there is a big difference between a 14-year-old and 24-year-old. if that child has been college and grad school, you are going to feel bad but they have the ability to go make money. your 14-year-old can't get a job and help support himself. maybe you can come up with a system i'll pay for groceries and pay for rent and pay for car payments. you need to come up with the rest. i worked with plenty of parents. >> eric: your rent and car payment and groceries, there is not much left, is there? >> the iphone and going happy hour with your friends, going out on dates. you don't need to pay for those things. >> eric: everybody is looking at the bottom of them. make them work. how do i make my kid work? >> number one, they need to get up at a reasonable hour like

they are going to a job. no laying on the couch until 10:00, 11:00 in the morning. you need to get up and start preparing for a day. putting on clothes like you are looking for a job, starting to do chores around the house. you have to make your kids accountable. oftentimes what happens the kids come back to the house they struggle with depression. if the kid is coming back into the house as an adult, most likely struggling with a failure loss of job, loss of a relationship, maybe they can't find a job at all. they are depressed. you have to help them. give them a couple days, maybe a week or so but they need to get back out there and do something whether you or in the real job world. >> eric: leave it there. dr. karen stewart and most importantly make them work a little. >> make them work a little. >> eric: we're going to have it leave it there. you can catch me in three minutes on "the five" and 11:30 on cashing in.

it's very important. make sure you set your dvrs now. its great show. goodbye everybody. see you tomorrow. .